THE INDIAN TRUSTS ACT, 1882 
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ARRANGEMENT OF SECTIONS 
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CHAPTER I 

PRELIMINARY 

PREAMBLE 

SECTIONS 

1.  Short title.  

Commencement. 
Local extent.  
Savings. 

2.  Repeal of enactments. 

3.  Interpretation-clause. 

Expressions defined in Act 9 of 1872. 

CHAPTER II 

OF THE CREATION OF TRUSTS 

4.  Lawful purpose. 

5.  Trust of immoveable property.  
Trust of moveable property. 

6.  Creation of trust. 

7.  Who may create trusts. 

8.  Subject of trust. 

9.  Who may be beneficiary.  
Disclaimer by beneficiary. 

10.  Who may be trustee. 
  No one bound to accept trust. 
  Acceptance of trust.  

Disclaimer of trust. 

CHAPTER III 

OF THE DUTIES AND LIABILITIES OF TRUSTEES 

11. Trustee to execute trust. 

12.  Trustee to inform himself of state of trust-property. 

13.  Trustee to protect title to trust-property. 

14.  Trustee not to set up title adverse to beneficiary. 

15. Care required from trustee. 

16. Conversion of perishable property. 

17. Trustee to be impartial. 

18. Trustee to prevent waste. 

19. Accounts and information. 

20. Investment of trust-money. 

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SECTIONS 

20A. Power to purchase redeemable stock at a premium.  

21.  Mortgage of land pledged to Government under Act 26 of 1871.  

  Deposit in Government Savings Bank. 

22.  Sale by trustee directed to sell within specified time. 

23. Liability for breach of trust. 

24. No set-off allowed to trustee. 

25. Non-liability for predecessor’s default. 

26.  Non-liability for co-trustee’s default.  
Joining in receipt for conformity. 

27.  Several liability of co-trustees.  

Contribution as between co-trustees. 

28. Non-liability of trustee paying without notice of transfer by beneficiary.  

29. Liability of trustee where beneficiary’s interest is forfeited to the Government. 

30. Indemnity of trustees. 

CHAPTER IV 

OF THE RIGHTS AND POWERS OF TRUSTEES 

31. Right to title-deed. 

32. Right to reimbursement of expenses. 

Right to be recouped for erroneous over-payment. 

33. Right to indemnity from gainer by breach of trust.  

34. Right to apply to Court for opinion in management of trust -property. 

35. Right to settlement of accounts. 

36. General authority of trustee. 

37. Power to sell in lots, and either by public auction or private contract.  

38. Power to sell under special conditions. 

Power to buy-in and re-sell. 
Time allowed for selling trust-property. 

39. Power to convey. 

40. Power to vary investments. 

41. Power to apply property of minors, etc., for their maintenance, etc.  

42. Power to give receipts. 

43. Power to compound, etc. 

44. Power to several trustees of whom one disclaims or dies.  

45. Suspension of trustee’s powers by decree. 

CHAPTER V 
OF THE DISABILITIES OF TRUSTEES 

46. Trustee cannot renounce after acceptance. 

47. Trustee cannot delegate. 

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SECTIONS 

48. Co-trustees cannot act singly. 

49. Control of discretionary power. 

50. Trustee may not charge for services. 

51. Trustee may not use trust-property for his own profit. 

52. Trustee for sale or his agent may not buy.  

53.  Trustee may not buy beneficiary’s interest without permission.  

Trustee for purchase. 

54. Co-trustees may not lend to one of themselves. 

CHAPTER VI 

OF THE RIGHTS AND LIABILITIES OF THE BENEFICIARY 

55. Rights to rents and profits. 

56.  Right to specific execution.  

Right to transfer of possession. 

57. Right to inspect and take copies of instrument of trust, accounts, etc.  

58. Right to transfer beneficial interest. 

59. Right to sue for execution of trust. 

60. Right to proper trustees. 

61. Right to compel to any act of duty.  

62. Wrongful purchase by trustee. 

63. Following trust-property—  

into the hands of third persons; 
into that into which it has been converted. 

64. Saving of rights of certain transferees. 

65. Acquisition by trustee of trust-property wrongfully converted. 

66.  Right in case of blended property. 

67. Wrongful employment by partner-trustee of trust property for partnership purposes. 

68. Liability of beneficiary joining in breach of trust.  

69. Rights and liabilities of beneficiary’s transferee. 

CHAPTER VII 

OF VACATING THE OFFICE OF TRUSTEE 

70. Office how vacated. 

71. Discharge of trustee. 

72. Petition to be discharged from trust. 

73. Appointment of new trustees on death, etc.  

74. Appointment by Court. 

Rule for selecting new trustees. 

75.  Vesting of trust-property in new trustees.  

Powers of new trustees. 

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SECTIONS 

76. Survival of trust. 

77. Trust how extinguished. 

78. Revocation of trust. 

CHAPTER VIII 

OF THE EXTINCTION OF TRUSTS 

79. Revocation not to defeat what trustees have duly done.  

CHAPTER IX 

OF CERTAIN OBLIGATIONS IN THE NATURE OF TRUSTS 

80.  Where obligation in nature of trust is created. 

81. [Repealed.]. 

82. [Repealed.]. 

83. Trust incapable of execution or executed without exhausting trust -property. 

84. Transfer for illegal purpose. 

85. Bequest for illegal purpose. 

Bequest of which revocation is prevented by coercion. 

86. Transfer pursuant to rescindable contract. 

87. Debtor becoming creditor’s representative. 

88.  Advantage gained by fiduciary. 

89. Advantage gained by exercise of undue influence. 

90. Advantage gained by qualified owner. 

91. Property acquired with notice of existing contract. 

92. Purchase by person contracting to buy property to be held on trust. 

93. Advantage secretly gained by one of several compounding creditors.  

94.  [Repealed.]. 

95.  Obligor’s duties, liabilities and disabilities. 

96. Saving of rights of bona fide purchasers. 

THE SCHEDULE. 

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THE INDIAN TRUSTS ACT, 1882  

ACT NO. 2 OF 18821  

An Act to define and amend the law relating to Private Trusts and  Trustees. 

Preamble.—WHEREAS  it  is  expedient  to  define  and  amend  the  law  relating  to  private  trusts  and 

trustees; It is hereby enacted as follows :—  

[13th January, 1882.] 

CHAPTER  I 

PRELIMINARY 

1. Short title.—This Act may be called the Indian Trusts Act, 1882:  

Commencement.—and it shall come into force on the first day of March, 1882. 

Local  extent.— 2 [It  extends  to  3 [the  whole  of  India  4 [except  the  State  of  Jammu  and 
Kashmir] and] the Andaman and Nicobar Islands  5***; but the Central Government may, from 
time  to  time,  by  notification  in  the  Official  Gazette,  extend  it to  6[the,  Andaman  and  Nicobar 
Islands] or to any part thereof.] 

Savings.—But nothing herein contained affects the rules of Muhammadan law as to  waqf, or the 
mutual relations of the members of an undivided family as determined by any customary or personal 
law,  or  applies  to  public  or  private  religious  or  charitable  endowments,  or  to  trusts  to  distribute 
prizes  taken  in  war  among  the  captors;  and  nothing  in  the  second  Chapter  of  this  Act  applies  to 
trusts created before the said day. 

2. Repeal of enactments.—The Statute and Acts mentioned in the Schedule hereto annexed shall, to 
the extent mentioned in the said Schedule, be repealed, in the territories to which this Act for the time 
being extends. 

3.  Interpretation-clause—“trust”:—A  “trust”  is  an  obligation  annexed  to  the  ownership  of 
property, and arising out of a confidence reposed in and accepted by the owner, or declared and accepted 
by him, for the benefit of another, or of another and the owner: 

“author  of  the  trust”:  “trustee”:  “beneficiary”:  “trust-property”:  “beneficial  interest”: 
“instrument of trust”:—the person who reposes or declares the confidence is called the “author of the 
trust”:  the  person  who  accepts  the  confidence  is  called  the  “trustee”:  the  person  for  whose  benefit  the 
confidence is accepted is called the “beneficiary”: the subject-matter of the trust is called “trust-property” 
or “trust-money”: the “beneficial interest” or “interest” of the beneficiary is his right against the trustee 
as  owner  of  the  trust-property;  and  the  instrument,  if  any,  by  which  the  trust  is  declared  is  called  the 
“instrument of trust”: 

“breach of trust”:—a breach of any duty imposed on a trustee, as such, by any law for the time 

being in force, is called a “breach of trust”: 

1. For Report of the Indian Law Commission on the Private Trusts Bill which they were instructed to consider among others, see 
Gazette  of  India,  1880,  Supplement,  p.  104;  and  for  Report  of  the  Select  Committee,  see  Gazette  of  India,  1880,  Pt.  V, 
Supplement, 1881, p. 766; for further Report of the Select Committee, see ibid., Supplement, 1882, p. 67; for Proceedings in 
Council, see ibid., Supplement, 1881, p. 687; and ibid., Supplement, 1882, p. 68. 

The Act has been extended to Berar by Act 4 of 1941; Dadra and Nagar Haveli by Regulation 6 of 1963, s. 2 and Sch. I; 
Pondicherry  by  Regulation  7  of  1963,  s.  3  and  Sch.  I;  Goa,  Daman  and  Diu  by  Regulation  11  of  1963,  s.  3  and  Sch.  and 
Sikkim by Notifn. No. S.O. 642E, dt. 24-8-1984 (w.e.f. 1-9-1984). 

2. Subs. by the A.O. 1948, for the first sentence. 
3. Subs. by the A.O. 1950, for “all the Provinces of India, except ”. 
4. Subs. by Act 3 of 1951, s. 3 and Sch., for  “except Part B States”. 
5. The words “and Panth Piploda” omitted by the A.O. 1950. 
6. Subs., ibid., for “either or both of the said provinces”. 

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“registered”:—and  in  this  Act,  unless  there  be  something  repugnant  in  the  subject  or  context, 

registered” means registered under the law for the registration of documents for the time being in force: 

“notice”:—a  person  is  said  to  have  “notice”  of  a  fact  either  when  he  actually  knows  that  fact  or 
when,  but  for  wilful  abstention  from  inquiry  or  gross  negligence,  he  would  have  known  it,  or  when 
information  of  the  fact  is  given  to  or  obtained  by  his  agent,  under  the  circumstances  mentioned  in  the 
Indian Contract Act, 1872 (9 of 1872), section 229; 

Expressions  defined in  Act  9  of  1872:—and  all expressions used herein and defined in the Indian 
Contract Act, 1872 (9 of 1872), shall be deemed to have the meanings respectively attributed to them by 
that Act. 

CHAPTER II 

OF THE CREATION OF TRUSTS 

4. Lawful purpose.—A trust may be created for any lawful purpose. The purpose of a trust is 
lawful  unless  it  is  (a)  forbidden  by  law,  or  (b)  is  of  such  a  nature  that,  if  permitted,  it  would 
defeat  the  provisions  of  any  law,  or  (c)  is  fraudulent,  or  (d)  involves  or  implies  injury  to  the 
person or property of another, or (e) the Court regards it as immoral or opposed to public policy. 

Every trust of which the purpose is unlawful is void. And where a trust is created for two purposes, of 
which one is lawful and the other unlawful, and the two purposes cannot be separated, the whole trust is 
void. 

Explanation.—In this section, the expression “law” includes, where the trust-property is immoveable 

and situate in a foreign country, the law of such country. 

Illustrations 

(a) A conveys property to B in trust to apply the profits to the nurture of female foundlings to be trained up as prostitutes. 

The trust is void. 

(b) A bequeaths property to B in trust to employ it in carrying on a  smuggling business, and out of the profits thereof to 

support A’s children. The trust is void. 

(c)  A, while in insolvent circumstances, transfers property to B in trust for A during his life, and after his death for B. A is 

declared an insolvent. The trust for A is invalid as against his creditors. 

5.  Trust  of  immoveable  property.—No  trust  in  relation  to  immoveable  property  is  valid 
unless  declared  by  a  non-testamentary  instrument  in  writing  signed  by  the  author  of  the  trust  or 
the trustee and registered, or by the will of the author of the trust or of the trus tee. 

Trust  of  moveable  property.—No  trust  in  relation  to  moveable  property  is  valid  unless 

declared as aforesaid, or unless the ownership of the property is transferred to the trustee.  

These rules do not apply where they would operate so as to effectuate a  fraud. 

6. Creation of trust.—Subject to the provisions of section 5, a trust is created when the author of the 
trust indicates with reasonable certainty by any words or acts (a) an intention on his part to create thereby 
a trust, (b) the purpose of the trust, (c) the beneficiary, and (d) the trust-property, and (unless the trust is 
declared by will or the author of the trust is himself to be the trustee) transfers the trust-property to the 
trustee. 

Illustrations 

(a)  A  bequeaths  certain  property  to  B,  “having  the  fullest  confidence  that  he  will  dispose  of  it  for  the  benefit  of  C.  This 

creates a trust so far as regards A and C. 

(b)  A  bequeaths  certain  property  to  B,  “hoping  he  will  continue  it  in  the  family”.  This  does  not  create  a  trust,  as  the 

beneficiary is not indicated with reasonable certainty. 

(c) A bequeaths certain property to B, requesting him to distribute it amongst such members of C ’s family as B should 

think most deserving. This does not create a trust, for the beneficiaries are not indicated with reasonable certainty. 

(d) A bequeaths certain property to B, desiring him to divide the bulk of it among C’s children. This does not create a trust, 

for the trust-property is not indicated with sufficient certainty. 

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(e) A bequeaths a shop and stock-in-trade to B, on condition that he pays A’s debts and a legacy to C. This is a condition, 

not a trust for A’s creditors and C. 

7.  Who may create trusts.—A trust may be created—  

(a) by every person competent to contracts 1, and 

(b)  with  the  permission  of  a  principal  Civil  Court  of  original  jurisdiction,  by  or  on  behalf  of  a 
minor;  but  subject  in  each  case  to  the  law  for  the  time  being  in  force  as  to  the 
circumstances and  extent in and to  which the author of the trust  may  d ispose  of the trust-
property. 

8.  Subject  of  trust.—The  subject-matter  of  a  trust  must  be  property  transferable  to  the 

beneficiary. 

It must not be a merely beneficial interest under a subsisting trust.  

9.  Who  may  be  beneficiary.—Every  person  capable  of  holding  property  may  be  a 

beneficiary. 

Disclaimer  by  beneficiary.—A  proposed  beneficiary  may  renounce  his  interest  under  the 
trust  by  disclaimer  addressed  to  the  trustee,  or  by  setting  up,  with  notice  of  the  trust,  a  claim 
inconsistent therewith. 

10.  Who  may  be  trustee.—Every  person  capable  of  holding  property  may  be  a  trustee;  but, 
where the trust involves the exercise of discretion, he cannot execute it unless he is competent to 
contract. 

No one bound to accept trust.—No one is bound to accept a trust.  

Acceptance  of  trust.—A  trust  is  accepted  by  any  words  or  acts  of  the  trustee  indicating  with 

reasonable certainty such acceptance. 

Disclaimer  of  trust.—Instead  of  accepting  a  trust,  the  intended  trustee  may,  within  a 
reasonable  period,  disclaim  it,  and  such  disclaimer  shall  prevent  the  trust-property  from 
vesting in him. 

A  disclaimer  by  one  of  two  or  more  co-trustees  vests  the  trust-property  in  the  other  or 

others, and makes him or them sole trustee or trustees from the date of the creation of the trust.  

Illustrations 

(a)  A bequeaths certain property to B and C, his executors, as trustees for D. B and C prove A’s will. This is in itself an 

acceptance of the trust, and B and C hold the property in trust for D. 

(b)  A transfers certain property to B in trust to sell it and to pay out of the proceeds A’s debts. B accepts the trust and sells 

the property. So far as regards B, a trust of the proceeds is created for A’s creditors. 

(c)  A bequeaths a lakh of rupees to B upon certain trusts and appoints him his executor. B severs the lakh from the general 

assets and appropriates it to the specific purpose. This is an acceptance of the trust. 

CHAPTER III 

OF THE DUTIES AND LIABILITIES OF TRUSTEES 

11. Trustee to execute trust.—The trustee is bound to fulfil the  purpose of the trust, and to 
obey the directions of the author of the trust given at the time of its creation, except as modified 
by the consent of all the beneficiaries being competent to contract.  

Where the beneficiary is incompetent to contract, his con sent may, for the purposes of this 

section, be given by a principal Civil Court of original jurisdiction.  

Nothing in this section shall be deemed to require a trustee to obey any direction when to 

do so would be impracticable, illegal or manifestly injurio us to the beneficiaries. 

1. See s.11 of the Indian Contract Act, 1872 (9 of 1872). 

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Explanation.—Unless  a  contrary  intention  be  expressed,  the  purpose  of  a  trust  for  the 
payment  of  debts  shall  be  deemed  to  be  (a)  to  pay  only  the  debts  of  the  author  of  the  trust 
existing  and  recoverable  at  the  date  of  the  instrumen t  of  trust,  or,  when  such  instrument  is  a 
will,  at  the  date  of  his  death,  and  (b)  in  the  case  of  debts  not  bearing  interest,  to  make  such 
payment without interest. 

Illustrations 

(a)  A, a trustee, is simply authorised to sell certain land by public auction. He cannot sell the land by private contract.  

(b)  A, a trustee of certain land for X, Y and Z, is authorised to sell the land to B for a specified sum. X, Y and Z, being 

competent to contract, consent that A may sell the land to C for a less sum. A may sell the land accordingly. 

(c)  A, a trustee for B and her children, is directed by the author of the trust to lend, on B’s request, trust-property to B’s 

husband, C, on the security of his bond. C becomes insolvent and B requests A to make the loan. A may refuse to make it. 

12. Trustee to inform himself of state of trust-property.—A trustee is bound to acquaint 
himself, as soon as possible, with the nature and circumstances of the trust -property; to obtain, 
where necessary, a transfer of the trust-property to himself; and (subject to the provisions of the 
instrument of trust) to get in trust-moneys invested on insufficient or hazardous security.  

Illustrations 

(a)  The trust-property is a debt outstanding on personal security. The instrument of trust gives the trustee no discretionary 

power to leave the debt so outstanding. The trustee’s duty is to recover the debt without unnecessary 

delay. 

(b) The trust-property is money in the hands of one of two co-trustees. No discretionary power is given by the instrument of 
trust. The other co-trustee must not allow the former to retain the money for a longer period than the circumstances of the case 
required. 

13.  Trustee to protect title to trust-property.—A trustee is bound to maintain and defend 
all  such  suits,  and  (subject  to  the  provisions  of  the  instrument  of  trust)  to  take  such  other  steps 
as, regard being  had to the nature and amount  or value of the trust -property,  may  be reasonably 
requisite  for  the  preservation  of  the  trust-property  and  the  assertion  or  protection  of  the  title 
thereto. 

Illustration 

The trust-property is immoveable property which has been given to the author of the trust by an unregistered instrument. 
Subject  to  the  provisions  of  the Indian  Registration  Act,  18771 (3  of  1877),  the  trustee’s  duty  is  to  cause  the  instrument  to  be 
registered. 

14.  Trustee  not  to  set  up  title  adverse  to  beneficiary.—The  trustee must not for himself 

or another set-up or aid any title to the trust-property adverse to the interest of the beneficiary. 

15.  Care  required  from  trustee.—A  trustee  is  bound  to  deal  with  the  trust -property  as 
carefully  as  a  man  of  ordinary  prudence  would  deal  with  such  property  if  it  were  his  own;  and,  in  the 
absence of  a contract  to  the  contrary,  a  trustee  so  dealing  is  not  responsible  for  the loss,  destruction  or 
deterioration of the trust-property. 

Illustrations 

(a) A,  living  in  Calcutta,  is  a  trustee  for  B,  living  in  Bombay.  A  remits  trust -funds  to  B  by  bills  drawn  by  a 
person  of  undoubted  credit  in  favour  of  the  trustee  as  such,  and  payable  at  Bombay.  The  bills  are  dishonoured.  A  is 
not bound to make good the loss. 

(b) A, a trustee of leasehold property, directs the tenant to pay the rents on account of the trust to a banker, B, then 
in  credit.  The  rents  are  accordingly  paid  to  B,  and  A  !eaves  the  money  with  B  only  till  wanted.  Before  the  money  is 
drawn out, B becomes insolvent. A, having had no reason to believe that B was in insolvent circumstances, is not bound 
to make good the loss. 

1. See now the Indian Registration Act, 1908 (16 of 1908). 

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(c) A,  a  trustee  of  two  debts  for  B,  releases  one  and  compounds  the  other,  in  good  faith,  and  reasonably 

believing that it is for B’s interest to do so. A is not bound to make good any loss caused thereby to B.  

(d) A,  a  trustee  directed  to  sell  the  trust-property  by  auction,  sells  the  same,  hut  does  not  advertise  the  sale  and 
otherwise  fails  in  reasonable  diligence  in  inviting  competition.  A  is  bound  to  make  good  the  loss  caused  thereby  to  the 
beneficiary. 

(e) A,  a  trustee  for  B,  in  execution of  his  trust, sells  the trust -property,  but  from  want of  due  diligence on his 

part fails to receive part of the purchase-money. A is bound to make good the loss thereby caused to B. 

(f)  A,  a  trustee  for  B  of  a  policy  of  insurance,  has  funds  in  hand  for  payment  of  the  premiums.  A  neglects  to 

pay the premiums, and the policy is consequently forfeited. A is bound to make good the loss to B.  

(g) A bequeaths certain moneys to B and C as trustees, and authori ses them to continue trust-moneys upon the 
personal  security  of  a  certain  firm  in  which  A  had  himself  invested  them.  A  dies,  and  a  change  takes  place  in  the 
firm. B and C must not permit the moneys to r emain upon the personal security of the new firm.  

(h) A,  a  trustee  for  B,  allows  the  trust  to  be  executed  solely  by  his  co-trustee,  C.  C  misapplies  the  trust-property.  A  is 

personally answerable for the loss resulting to B. 

16. Conversion of perishable  property.—Where the trust is created for the benefit of several 
persons  in  succession,  and  the  trust-property  is  of  a  wasting  nature  or  a  future  or  reversionary 
interest,  the  trustee  is  bound,  unless  an  intention  to  the  contrary  may  be  inferred  from  the 
instrument of trust, to convert the property into property of a permanent and immediately profitable 
character. 

Illustrations 

(a)  A  bequeaths  to  B  all  his  property  in  trust  for  C  during  his  life,  and  on  his  death  for  D,  and  on  D ’s  death 
for E. A’s property consists of three leasehold houses, and there is nothing in A ’s will to show that he intended the 
houses to be enjoyed in specie. B should sell the houses, and invest the proceeds in accordance with section 20.  

(b)  A bequeaths to B his three leasehold houses in Calcutta and all the furniture therein in trust for C during his 
life,  and  on  his  death  for  D,  and  on  D’s  death  for  E.  Here  an  intention  that  the  houses  and  furniture  should  be 
enjoyed in specie appears clearly, and B should not sell them.  

17. Trustee to be impartial.—Where there are more beneficiaries than one, the trustee is bound 

to be impartial, and must not execute the trust for the advantage of one at the expense of another.  

Where  the  trustee  has  a  discretionary  power,  nothing  in  this  sect ion  shall  be  deemed  to 

authorize the Court to control the exercise reasonably and in good faith of such discretion.  

Illustration 

A,  a  trustee  for  B,  C  and  D,  is  empowered  to  choose  between  several  specified  modes  of  investing  the  trust -
property.  A  in  good  faith  chooses  one  of  these  modes.  The  Court  will  not  interfere,  although  the  result  of  the 
choice may be to vary the relative rights of B, C and D.  

18.  Trustee  to  prevent  waste.—Where  the  trust  is  created  for  the  benefit  of  several  persons  in 
succession and one of them is in possession of the trust-property, if he commits, or threatens to commit, 
any  act  which  is  destructive  or  permanently  injurious  thereto,  the  trustee  is  bound  to  take  measures  to 
prevent such act. 

19.  Accounts and information.—A trustee is bound (a) to keep clear and accurate accounts of the 
trust- property, and (b), at all reasonable times, at the request of the beneficiary, to furnish him with full 
and accurate information as to the amount and state of the trust-property. 

1[20. Investment of trust-money.—Where the trust-property consists of money and cannot be 
applied immediately or at an early date to the purposes of the trust, the trustee  shall, subject to any 
direction contained in the instrument of trust, invest the money in any of the securities or class of 
securities  expressly  authorised  by  the  instrument  of  trust  or  as  specified  by  the  Central 
Government, by notification in the Official Gazette: 

Provided that where there is a person competent to contract and entitled in possession to 
receive the  income of the trust-property for his life, or for any  greater estate, no investment 

1. Subs. by Act 34 of 2016, s. 2, for section 20 (w.e.f. 17-4-2017). 

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in  any  of  the  securities  or  class  of  securities  mentioned  above  shall  be  made  without  his 
consent in writing. 

Explanation.—For  the  purposes  of  this  section,  the  expression  “securities”  shall  have  the 
same  meaning  as  assigned  to  it  in  clause  (h)  of  section  2  of  the  Securities  Contracts 
(Regulation) Act, 1956 (42 of 1956).] 

1[20A. Power to purchase redeemable stock at a premium.—(1) A trustee may invest in any of the 
securities mentioned or referred to in section 20, notwithstanding that the same may be redeemable and 
that the price exceeds the redemption value: 

2* 

* 

* 

* 

* 

(2)  A  trustee  may  retain  until  redemption  any  redeemable  stock,  fund  or  security  which  may  have 

been purchased in accordance with this section.] 

21. Mortgage of land pledged to Government under Act 26 of 1871. Deposit in Government 
Savings  Bank.—Nothing  in  section  20  shall  apply  to  investments  made  before  this  Act  comes  into 
force,  or  shall  be  deemed  to  preclude  an  investment  on  a  mortgage  of  immoveable  property  already 
pledged  as  security  for  an  advance  under  the  Land  Improvement  Act,  1871 3,  or,  in  case  the  trust-
money does not exceed three thousand rupees, a deposit thereof in a Government Savings Bank. 

22. Sale by trustee directed to sell within specified time.—Where a trustee directed to sell within a 
specified time extends such time, the burden of proving, as between himself and the beneficiary, that the 
latter is not prejudiced by the extension lies upon the trustee, unless the extension has been authorised by 
a principal Civil Court of original jurisdiction. 

Illustration 

A bequeaths property to B, directing him with all convenient speed and within five years to sell it, and  apply the proceeds 
for the benefit of C. In the exercise of reasonable discretion, B postpones the sale for six years. The sale is not thereby rendered 
invalid, but C, alleging that he has been injured by the postponement, institutes a suit against B to obtain compensation. In such 
suit the burden of proving that C has not been injured lies on B. 

23. Liability for breach of trust.—Where the trustee commits a breach of trust, he is liable to 
make  good  the  loss  which  the  trust-property  or  the  beneficiary  has  thereby  sustained,  unless  the 
beneficiary  has  by  fraud  induced  the  trustee  to  commit  the  breach,  or  the  beneficiary,  being 
competent to contract, has himself, without coercion or undue influence having been brought to bear 
on  him,  concurred  in  the  breach,  or  subsequently  acquiesced  therein,  with  full  knowledge  of  the 
facts of the case and of his rights as against the trustee. 

A trustee committing a breach of trust is not liable to pay interest except in the following cases:—  

(a) where he has actually received interest; 

(b)  where the breach consists in unreasonable delay in paying trust-money to the beneficiary; 

(c)  where the trustee ought to have received interest, but has not done so;  

(d) where he may be fairly presumed to have received interest;  

He is liable, in case (a), to account for the interest actually received, and, in cases (b), (c) and 
(d), to account for simple interest at the rate of six per cent. per annum, unless the Court otherwise 
directs. 

1. Ins. by Act 1 of 1916, s. 3.  
2. The proviso omitted by Act 34 of 2016, s. 3 (w.e.f. 17-4-2017). 
3. See now the Land Improvement Loans Act, 1883 (19 of 1883).  

10 

 
 
 
 
 
 
 
 
 
 
 
                                                      
 
(e)  where the  breach  consists in failure to invest  trust-money  and to accumulate  the  interest or 
dividends thereon, he is liable to account for compound interest (with half-yearly rests) at the same 
rate; 

(f)  where the breach consists in the employment of trust-property or the proceeds thereof in 
trade  or  business,  he  is  liable  to  account,  at  the  option  of  the  beneficiary,  either  for  compound 
interest (with half-yearly rests) at the same rate, or for the net profits made by such employment. 

Illustrations 

(a) A trustee improperly leaves trust-property outstanding, and it is consequently lost: he is liable to make good the property 

lost, but he is not liable to pay interest thereon. 

(b) A bequeaths a house to B in trust to sell it and pay the proceeds to C. B neglects to sell the house for a great length of 

time, whereby the house is deteriorated and its market-price falls. B is answerable to C for the loss. 

(c)  A trustee is guilty of unreasonable delay in investing trust-money in accordance with section 20, or in paying it to the 

beneficiary. The trustee is liable to pay interest thereon for the period of the delay. 

(d) The duty of the trustee is to invest trust-money in any of the securities mentioned in section 20, clause (a), (b), (c) or (d). 
Instead of so doing, he retains the money in his hands. He is liable, at the option of the beneficiary, to be charged either with the 
amount  of  the  principal  money  and  interest,  or  with  the  amount  of  such  securities  as  he  might  have  purchased  with  the  trust-
money when the investment should have been made, and the intermediate dividends and interest thereon. 

(e)  The  instrument  of  trust  directs  the  trustee  to  invest  trust-money  either  in  any  of  such  securities  or  on  mortgage  of 

immoveable property. The trustee does neither. He is liable for the principal money and interest. 

(f)  The instrument of trust directs the trustee to invest trust-money in any of such securities and to accumulate the dividends 
thereon. The trustee disregards the direction. He is liable, at the option of the beneficiary, to be charged either with the amount of 
the  principal  money  and  compound  interest,  or  with  the  amount of  such  securities  as  he  might  have  purchased  with  the  trust-
money when the investment should have been made, together with the amount of the accumulation which would have arisen from 
a proper investment of the intermediate devidends. 

(g) Trust-property is invested in one of the securities mentioned in section 20, clause  (a), (b), (c) or (d). The trustee sells 
such security for some purpose not authorised by the terms of the instrument of trust. He is liable, at the option of the beneficiary, 
either to replace the security with the intermediate dividends and interest thereon, or to account for the proceeds of the sale with 
interest thereon. 

(h) The  trust-property  consists  of  land.  The  trustee  sells  the  land  to a  purchaser  for  a  consideration without  notice  of  the 
trust. The trustee is liable, at the option of the beneficiary, to purchase other land of equal value to be settled upon the  like trust, 
or to be charged with the proceeds of the sale with interest. 

24.  No  set-off  allowed  to  trustee.—A  trustee  who  is  liable  for  a  loss  occasioned  by  a 
breach  of  trust  in  respect  of  one  portion  of  the  trust -property  cannot  set-off  against  his 
liability  a  gain  which  has  accrued  to  another  portion  of  the  trust -property  through  another 
and distinct breach of trust. 

25. Non-liability for predecessor’s default.—Where a trustee succeeds another, he is not, as such, 

liable for the acts or defaults of his predecessor. 

26.  Non-liability  for  co-trustee’s  default.—Subject  to  the  provisions  of  sections  13  and 

15, one trustee is not, as such, liable for a breach of trust committed by his co -trustee: 

Provided  that,  in  the  absence  of  an  express  declaration  to  the  contrary  in  the  instrument  of  trust,  a 

trustee is so liable—  

(a)  where  he  has  delivered  trust-property  to  his  co-trustee  without  seeing  to  its  proper 

application; 

(b) where  he  allows  his  co-trustee  to  receive  trust-property  and  fails  to  make  due 
enquiry as to the co-trustee’s dealings therewith, or allows him to retain it longer than the 
circumstances of the case reasonably require;  

(c)  where  he  becomes  aware of  a  breach  of trust  committed  or  intended  by  his  co-trustee,  and 
either  actively  conceals  it  or  does  not  within  a  reasonable  time  take  proper  steps  to  protect  the 
beneficiary’s interest. 

11 

 
Joining in receipt for conformity.—A co-trustee who joins in signing a receipt for trust -
property  and  proves  that  he  has  not  received  the  same  is  not  answerable,  by  reason  of  such 
signature only, for loss or misapplication of the property by his co -trustee. 

Illustration 

A bequeaths certain property to B and C, and directs  .ahem to sell it and invest the proceeds for the benefit of D. 
B and C accordingly sell the property, and the purchase-money is received by B and retained in his hands. C pays no 
attention  to  the  matter  for  two  years  and  then  calls  on  B  to  make  the  investment.  B  is  unable  to  do  so,  becomes 
insolvent, and the purchase-money is lost. C may be compelled to make good the amount. 

27. Several liability of co-trustees.—Where co-trustees jointly commit a breach of trust, 
or  where  one  of  them  by  his  neglect  enables  the  o ther  to  commit  a  breach  of  trust,  each  is 
liable to the beneficiary for the whole of the loss occasioned by such breach.  

Contribution as between co-trustees.—But as between the trustees themselves, if one be 
less  guilty  than  another  and  has  had  to  refund  t he  loss,  the  former  may  compel  the  latter,  or 
his  legal  representative  to  the  extent  of  the  assets  he  has  received,  to  make  good  such  loss; 
and  if  all  be  equally  guilty,  any  one  or  more  of  the  trustees  who  has  had  to  refund  the  loss 
may compel the others to contribute. 

Nothing  in  this  section  shall  be  deemed  to  authori se  a  trustee  who  has  been  guilty  of 

fraud to institute a suit to compel contribution.  

28.  Non-liability  of  trustee  paying  without  notice  of  transfer  by  beneficiary. —When 
any beneficiary’s interest becomes vested in another person, and the trustee,  not having notice 
of  the  vesting,  pays  or  delivers  trust -property  to  the  person  who  would  have  been  entitled 
thereto  in  the  absence  of  such  vesting,  the  trustee  is  not  liable  for  the  property  so  paid  or 
delivered. 

29. Liability of trustee where beneficiary’s interest is forfeited to the Government.—When the 
beneficiary’s  interest  is  forfeited  or  awarded  by  legal  adjudication 1[to  the  Government],  the  trustee  is 
bound  to  hold  the  trust-property  to  the  extent  of  such  interest  for  the  benefit  of  such  person  in  such 
manner as 2[the State Government] may direct in this behalf. 

30.  Indemnity  of  trustees.—Subject  to  the  provisions  of  the  instrument  of  trust  and  of 
sections  23  and  26,  trustees  shall  be  respecti vely  chargeable  only  for  such  moneys,  stocks, 
funds and securities as they respectively actually receive, and shall not be answerable the one 
for  the  other  of  them,  nor  for  any  banker,  broker  or  other  person  in  whose  hands  any  trust -
property  may  be  placed,  nor  for  the  insufficiency  or  deficiency  of  any  stocks,  funds  or 
securities, nor otherwise for involuntary losses.  

CHAPTER IV 

OF THE RIGHTS AND POWERS OF TRUSTEES 

31. Right to title-deed.—A trustee is entitled to have in his possession the instrument of trust and all 

the documents of title (if any) relating solely to the trust-property. 

32.  Right  to  reimbursement  of  expenses.—Every  trustee  may  reimburse  himself,  or  pay 
or discharge out of the trust-property, all expenses properly incurred in or about the  execution 
of  the  trust,  or  the  realisation,  preservation  or  benefit  of  the  trust -property,  or  the  protection 
or support of the beneficiary. 

If he pays such expenses out of his own pocket he has a first charge upon the trust -property 
for such expenses and interest thereon; but such charge (unless the expenses have been incurred 
with  the  sanction  of  a  principal  Civil  Court  of  original  jurisdiction)  shall  be  enforced  only  by 
prohibiting and disposition of the trust-property without previous payment of such expenses and 
interest. 

1. The words “to Government” successively amended by the A.O. 1937 and the A.O. 1950, to read as above. 
2. Subs. by the A.O. 1937, for “the Government”.  

12 

 
                                                      
 
If the trust-property fail, the trustee is entitled to recover from the beneficiary per sonally 
on whose behalf he acted, and at whose request, expressed or implied, he made the payment, 
the amount of such expenses. 

Right to be recouped for erroneous over-payment.—Where a trustee has by mistake made 
an over-payment to the beneficiary, he may reimburse the trust -property out of the beneficiary’s 
interest. If such interest fail, the trustee is entitled to recover from the beneficiary perso nally the 
amount of such over-payment. 

33. Right to indemnity from gainer by breach of trust. —A person other than a trustee 
who has gained an advantage from a breach of trust must indemnify the trustee to the extent 
of  the  amount  actually  received  by  such  person  under  the  breach;  and  where  he  is  a 
beneficiary the trustee has a charge on his interest for such amount.  

Nothing in this section shall be deemed to entitle a trustee to be indemnified who has, in committing 

the breach of trust, been guilty of fraud. 

34.  Right  to apply to  Court for  opinion in management  of trust-property.—Any  trustee 
may,  without  instituting  a  suit,  apply  by  petition  to  a  principal  Civil  Court  of  original 
jurisdiction  for  its  opinion,  advice  or  direction  on  any  present  questions  res pecting  the 
management  or  administration  of  the  trust-property  other  than  questions  of  detail,  difficulty  or 
importance, not proper in the opinion of the Court for summary disposal.  

A copy of such petition shall be served upon, and the hearing thereof may  be attended by, 

such of the persons interested in the application as the Court thinks fit.  

The trustee stating in good faith the facts in such petition and acting upon the opinion, advice 
or direction given by the Court shall be deemed, so far as regards  his own responsibility, to have 
discharged his duty as such trustee in the subject-matter of the application. 

The costs of every application under this section shall be in the discretion of the Court to which it is 

made. 

35.  Right  to  settlement  of  accounts.—When the  duties of a trustee, as such, are completed, 
he is entitled to have the accounts of his administration of the trust -property examined and settled; 
and,  where  nothing  is  due to the  beneficiary under the  trust, to an  acknowledgment  in  writing to 
that effect. 

36.  General  authority  of  trustee.—In  addition  to  the  powers  expressly  conferred  by  this 
Act  and  by  the  instrument  of  trust,  and  subject  to  the  restrictions,  if  any,  contained  in  such 
instrument, and to the provisions of section 17, a trustee may do all acts which are reasonable 
and proper for the realisation, protection or benefit of the trust-property, and for the protection 
or support of a beneficiary who is not competent to contract.  

1* 

             *  

             *  

             *  

             * 

Except with the permission of a principal Civil Court of original jurisdiction, no trustee shall 
lease trust-property for a term exceeding twenty-one  years from the date  of executing the lease, 
nor without reserving the best yearly rent that can be reasonably obtained.  

37.  Power  to  sell  in  lots,  and  either  by  public  auction  or  private  contract.—Where  the 
trustee is empowered to sell any trust-property, he may sell the same subject to prior charges or 
not, and either together or in lots, by public auction or private contract, and either at one time or 
at several times, unless the instrument of trust otherwise directs.  

38.  Power  to  sell  under  special  conditions.  Power  to  buy-in  and  re-sell.—The  trustee 
making any such sale may insert such reasonable stipulations either as to title or evidence of title, 
or  otherwise, in any  conditions of sale  or  contract for  sale,  as  he thinks  fit;  and  may  also  buy -in 
the property or any part thereof at any sale by auction, and rescind or vary any contract for sale, 

1. Second paragraph rep. by Act 12 of 1891, s. 2 and the First Schedule.  

13 

 
 
 
 
 
 
                                                      
 
and  re-sell  the  property  so  bought  in,  or  as  to  which  the  contract  is  so  rescinded,  without  being 
responsible to the beneficiary for any loss occasioned thereby. 

Time  allowed  for  selling  trust-property.—Where  a  trustee  is  directed  to  sell  trust-property  or  to 
invest trust-money in the purchase of property, he may exercise a reasonable discretion as to the time of 
effecting the sale or purchase. 

Illustrations 

(a) A bequeaths property to B, directing him to sell it with all convenient speed and pay the proceeds to C. This does not 

render an immediate sale imperative. 

(b) A  bequeaths  property  to  B,  directing  him  to  sell  it  at  such  time  and  in  such  manner  as  he  shall  think  fit  and 
invest the proceeds for the benefit of C. This does not authorise B, as between him and C, to postpone the sale to an 
indefinite period. 

39. Power to convey.—For the purpose of completing any such sale, the trustee shall have power to 

convey or otherwise dispose of the property sold in such manner as may be necessary. 

40.  Power  to  vary  investments.—A  trustee  may,  at  his  discretion,  call  in  any  trust-property 
invested  in  any  security  and  invest  the  same  on  any  of  the  securities  mentioned  or  referred  to  in 
section 20, and from time to time vary any such investments for others of the same nature: 

Provided  that,  where  there  is  a  person  competent  to  contract  and  entitled  at  the  time  to 
receive the income of the trust-property for his life, or for any greater estate, no such change of 
investment shall be made without his consent in writing. 

41.  Power  to  apply  property  of  minors,  etc.,  for  their  maintenance,  etc. —Where  any 
property  is  held  by  a  trustee  in  trust  for  a  minor,  such  trustee  may,  at  his  discretion,  pay  to  the 
guardians (if any) of such minor, or otherwise apply for or towards his maintenance or education 
or  advancement in  life,  or  the  reasonable  expenses  of  his religious   worship,  marriage  or funeral, 
the whole or any part of the income to which he may be entitled in respect of such property; and such 
trustee  shall  accumulate  all  the  residue  of  such  income  by  way  of  compound  interest,  by  investing  the 
same and the resulting income thereof from time to time in any of the securities mentioned or referred to 
in  section  20,  for  the  benefit  of  the  person  who  shall  ultimately  become  entitled  to  the  property  from 
which such accumulations have arisen: Provided that such trustee may, at any time, if he thinks fit, apply 
the whole or any part of such accumulations as if the same were part of the income arising in the then 
current year. 

Where  the  income  of  the  trust-property  is  insufficient  for  the  minor’s  maintenance  or  education  or 
advancement in life, or the reasonable expenses of his religious worship, marriage or funeral, the trustee 
may, with the permission of a principal Civil Court of original jurisdiction, but not otherwise, apply the 
whole or any part of such property for or towards such maintenance, education, advancement or expenses. 

Nothing in this section shall be deemed to affect the provisions of any local law for the time being in 

force relating to the persons and property of minors. 

42.  Power  to  give  receipts.—Any  trustees  or  trustee  may  give  a  receipt  in  writing  for  any 
money,  securities  or  other  moveable  property  payable,  transferable  or  deliverable  to  them  or  him 
by reason, or in the exercise, of any trust or power; and, in the absence of fraud, such receipt shall 
discharge the person paying, transferring or delivering the same therefrom, and from seeing to the 
application thereof, or being accountable for any loss or misapplication thereof.  

43. Power to compound, etc.—Two or more trustees acting together may, if and as they think fit—  

(a)  accept any composition or any security for any debt or for any property claimed; 

(b) allow any time for payment of any debt; 

(c)  compromise, compound, abandon, submit to arbitration or otherwise settle any debt, account, 

claim or thing whatever relating to the trust; and 

14 

 
(d)  for any of those purposes, enter into, give, execute and do such agreements, instruments 
of  composition  or  arrangement,  releases  and  other  things  as  to  them  seem  expedient,  without 
being responsible for any loss occasioned by any act or thing so done by them in good faith. 

The  powers  conferred  by  this  section  on  two  or  more  trustees  acting  together  may  be 
exercised  by  a  sole  acting  trustee  when  by  the  instrument  of  trust,  if  any,  a  sole  trustee  is 
authorized to execute the trusts and powers thereof. 

This  section  applies  only  if  and  as  far  as  a  contrary  intention  is  not  expressed  in  the 
instrument of trust, if any, and shall have effect subject to the terms of that instrument and to the 
provisions therein contained. 

This section applies only to trusts created after this Act comes into force.  

44.  Power  to  several  trustees  of  whom  one  disclaims  or  dies.—When  an  authority  to  deal 
with the trust-property is given to several trustees and one of them disclaims or dies, t he authority 
may  be exercised by the continuing trustees,  unless from the terms of the instrument of trust it is 
apparent that the authority is to be exercised by a number in excess of the number of the remaining 
trustees. 

45.  Suspension  of  trustee’s  powers  by  decree.—Where  a  decree  has  been  made  in  a  suit 
for the execution of a trust, the trustee must not exercise any of his powers except in conformity with such 
decree, or with the sanction of the Court by which the decree has been made, or, where an appeal against 
the decree is pending, of the Appellate Court. 

CHAPTER V 

OF THE DISABILITIES OF TRUSTEES 

4 6.   Tru st ee   ca n not   r en ou nce   af t er  acc ep t a nce . — A  t r u st ee  wh o  h as  ac cep t ed 
t h e  t r ust   ca nn ot   af t er w ar ds  r en ou nce   i t   exce pt   ( a)   wi t h   t he   p er mi s si on   o f   a   p r i nci pal  
C i vi l   C our t   of   or i gi n al   j ur i s di ct i o n,   or   ( b)   i f   t h e  b enef i ci ar y  i s   co mp et e nt   t o 
c ont r act ,   wi t h   hi s   con sent ,   or   ( c)   b y  vi r t ue   o f   a  spe ci al   po w er   i n   t he   i nst r u me nt   of  
t r ust .  

47.  Trustee  cannot  delegate. —A  trustee  cannot  del egate  his  office  or  any  of  his 
duties  either  to  a  co -trustee  or  to  a  stranger,  unless  (a)  the  instrument  of  trust  so 
provides, or (b) the delegation is in the regular course of business, or  (c) the delegation 
is  necessary,  or  (d)  the  beneficiary,  being  competent  to  contract,  consents  to  the 
delegation. 

Explanation.—The  appointment  of  an  attorney  or  proxy  to  do  an  act  merely 
ministerial  and  involving  no  independent  discretion  is  not  a  delegation  within  the 
meaning of this section.  

Illustrations 

(a) A bequeaths certain property to B and C on certain trusts to be executed by them or the survivor of them 
or the assigns of such survivor. B dies. C may bequeath the trust -property to D and E upon the trusts of A’s will. 

(b) A  is  a  trustee  of  certain  property  with  power  to  sell  the  same.  A  may  employ  an  auctioneer  to  effect  the 

sale. 

(c)  A bequeaths to B fifty houses let at monthly rents in trust to collect the rents and pay them to C. B may employ a proper 

person to collect these rents. 

48.  Co- trust ees  cannot  act  si ngly. —When  t here  ar e   more  tr ust ees  t han  one,  al l 
must  j oi n i n t he  executi on of  the tr ust,  except   wher e the i nst rument  of  tr ust  ot her wise 
provi des. 

49.  Control  of  discretionary  power. —Where  a  discretionary  power  conferred  on   a 
trustee is  not  exercised  reasonably  and  in  good  faith,  such  power  may  be  controlled  by  a 
principal Civil Court of original jurisdiction.  

15 

 
50.  Trust ee  may  not  charge  f or  services. —In  t he  absence  of   expr ess  directi ons 
t o  t he  contrar y  cont ained  i n  t he  instr ument  of  tr ust   or   of  a  contr act   t o  t he  contr ar y  
ent ered  i nt o  wit h  t he  benef ici ar y  or   t he  Cour t   at   the  ti me  of   accepti ng  the  tr ust,  a 
t rustee  has  no  ri ght  t o  remuneration  for  his  tr oubl e,  skill  and  loss  of  ti me  in 
executi ng t he tr ust .  

Nothing in this section applies to any Off icial Trustee, Administrator General, Public 

Curator, or person holding a certificate of administration.  

51. Trustee may not use trust-property for his own profit.  —A trustee may not use 
or  deal  with  the  trust-property  for  his  own  profit  or  for  any  other  p urpose  unconnected 
with the trust. 

52.  Trustee for sale  or  his  agent may  not  buy. —No trustee whose duty it is to sell 
trust-property,  and  no  agent  employed  by  such  trustee for  the  purpose  of  the  sale,  may, 
directly  or  indirectly,  buy  the  same  or  any  interest  therein,  on  his  own  account  or  as 
agent for a third person.  

53. Trustee may not buy beneficiary’s interest without permission.—No trustee, and no 
person who has recently ceased to be a trustee, may, without the permission of a principal Civil Court of 
original  jurisdiction,  buy  or  become  mortgagee  or  lessee  of  the  trust-property  or  any  part  thereof;  and 
such permission shall not be given unless the proposed purchase, mortgage or lease is manifestly for the 
advantage of the beneficiary. 

Trustee  for  purchase.—And  no  trustee  whose  duty  it  is  to  buy  or  to  obtain  a  mortgage 
or lease of particular property for the beneficiary may buy it, or any part thereof, or obtain a 
mortgage or lease of it, or any part thereof, for himself.  

54. Co-trustees may not lend to one of themselves.—A trustee or co-trustee whose duty it 
is to invest trust-money  on mortgage or personal security must not invest it on a mortgage by, 
or on the personal security of, himself or one of his co -trustees. 

CHAPTER VI 

OF THE RIGHTS AND LIABILITIES OF THE BENEFICIARY 

55.  Rights  to  rents  and  profits.—The  beneficiary  has, subject  to  the  provisions  of the 

instrument of trust, a right to the rents and profits of the trust -property. 

56.  Right  to  specific  execution.—The  beneficiary is entitled  to have the intention of the 

author of the trust specifically executed to the extent of the beneficiary ’s interest; 

Right  to  transfer  of  possession.—and,  where  there  is  only  one  beneficiary  and  he  is 
competent  to  contract,  or  where  there  are  several  beneficiaries  and  they  are  competent  to 
contract and all of one mind, he or they may require the trustee to transfer the trust -property 
to him or them, or to such person as he or they may direct.  

When  property  has  been  transferred  or  bequeathed  for  the  ben efit  of  a  married  woman,  so 
that she shall not have power to deprive herself of her beneficial interest, nothing in the second 
clause of this section applies to such property during her marriage.  

Illustrations 

Certain Government securities are given to trustees upon trust to accumulate the interest until A attains the age of 24, and 
then to transfer the gross amount to him. A on attaining majority may, as the person exclusively interested in the trust-property, 
require the trustees to transfer it immediately to him. 

A bequeaths Rs.10,000 to trustees upon trust to purchase an annuity for B, who has attained his majority and is otherwise 

competent to contract. B may claim the Rs. 10,000. 

A transfers certain property to B and directs him to sell or invest it for the benefit of C, who is competent to contract. C may 

elect to take the property in its original character. 

57. Right to inspect and take copies of instrument of trust, accounts, etc. —The beneficiary 
has  a  right,  as  against  the  trustee  and  all  persons  claiming  under  him  with  notice  of  the  trust,  to 

16 

 
inspect  and  take  copies  of  the  instrument  of  trust,  the  documents  of  title  relating  solely  to  the 
trust-property,  the  accounts  of  the  trust-property  and  the  vouchers  (if  any)  by  which  they  are 
supported,  and  the  cases  submitted  and  opinions  taken  by  the  trustee  for  his  guidance  in  the 
discharge of his duty. 

58.  Right  to  transfer  beneficial  interest.—The  beneficiary, if competent to contract, may 
transfer  his  interest,  but  subject  to  the  law  for  the  time  being  in   force  as  to  the  circumstances 
and extent in and to which he may dispose of such interest:  

Provided  that  when  property  is  transferred  or  bequeathed  for  the  benefit  of  a  married 
woman, so that  she shall not have power to  deprive  herself  of  her beneficial in terest, nothing 
in this section shall authorise her to transfer such interest during her marriage.  

59.  Right  to  sue  for  execution  of  trust.—Where  no  trustees  are  appointed  or  all  the 
trustees  die,  disclaim  or  are  discharged,  or  where  for  any  other  reason  t he  execution  of  a 
trust by the trustee is or becomes impracticable, the beneficiary may institute a suit for the execution of 
the trust, and the trust shall, so far as may be possible, be executed by the Court until the appointment of a 
trustee or new trustee. 

60.  Right  to  proper  trustees.—The  beneficiary  has  a  right  (subject  to  the  provisions  of 
the  instrument  of  trust)  that  the  trust -property  shall  be  properly  protected  and  held  and 
administered by proper persons and by a proper number of such persons.  

Explanation I.—The following are not proper persons within the meaning of this section:—  

A person domiciled abroad: an alien enemy: a person having an interest inconsistent with that of the 
beneficiary: a person in insolvent circumstances; and, unless the personal law of the beneficiary allows 
otherwise, a married woman and a minor. 

Explanation II.—When the administration of the trust involves the receipt and custody of money, the 

number of trustees should be two at least. 

Illustrations 

(a) A, one of several beneficiaries, proves that B, the trustee, has improperly disposed of part of the trust-property, or that 
the  property  is  in  danger  from  B’s  being  in insolvent  circumstances,  or  that he  is  incapacitated  from  acting  as  trustee.  A  may 
obtain a receiver of the trust-property. 

(b) A bequeaths certain jewels to B in trust for C. B dies during A’s lifetime; then A dies. C is entitled to have the property 

conveyed to a trustee for him. 

(c)  A conveys certain property to four trustees in trust for B. Three of the trustees die. B may institute a suit to have three 

new trustees appointed in the place of the deceased trustees. 

(d) A conveys certain property to three trustees in trust for B. All the trustees disclaim. B may institute a suit to have three 

trustees appointed in place of the trustees so disclaiming. 

(e)  A, a trustee for B, refuses to act, or goes to reside permanently out of 1[India], or is declared an insolvent, or compounds 
with his creditors, or suffers a co-trustee to commit a breach of trust. B may institute a suit to have A removed and a new trustee 
appointed in his room. 

61.  Right  to  compel  to  any  act  of  duty.—The  beneficiary  has  a  right  that  his  trustee  shall  be 
compelled  to  perform  any  particular  act  of  his  duty  as  such,  and  restrained  from  committing  any 
contemplated or probable breach of trust. 

Illustrations 

(a) A contracts with B to pay him monthly Rs.100 for the benefit of C. B writes and signs a letter declaring that he will hold 
in trust for C the money so to be paid. A fails to pay the money in accordance with his contract. C may compel B on a proper 
indemnity to allow C to sue on the contract in B’s name. 

(b) A is trustee of certain land, with a power to sell the same and pay the proceeds to B and C equally. A is about to 
make an improvident sale of the land. B may sue on behalf of himself and C for an injunction to restrain A from making 
the sale. 

1. Subs. by the A.O. 1950, for “the provinces”.  

17 

 
                                                      
 
62.  Wrongful  purchase  by  trustee.—Where  a  trustee  has  wrongfully  bought  trust-property, 
the beneficiary has a right to have the property declared subject to the trust or retransferred by the 
trustee,  if  it  remains  in  his  hands  unsold,  or,  if  it  has  been  bought  from  him  by  any  person  with 
notice of the trust, by such person. But in such case the beneficiary must repay the purchase -money 
paid  by  the  trustee,  with  interest,  and  such  other  expenses  (if  any)  as  he  has  properly  incurred  in 
the preservation of the property; and the trustee or purchaser must  (a) account for the net profits of 
the  property,  (b)  be  charged  with  an  occupation-rent,  if  he  has  been  in  actual  possession  of  the 
property, and (c) allow the beneficiary to deduct a proportionate part of the purchase -money if the 
property has been deteriorated by the acts or omissions of the trustee or purchaser.  

Nothing in this section—  

(a)  impairs  the  rights  of  lessees  and  others  who,  before  the  institution  of  a  suit  to  have  the 
property declared subject to the trust or retransferred, have contracted in good faith with the trustee or 
purchaser; or 

(b)  entitles  the  beneficiary  to  have  the  property  declared  subject  to  the  trust  or  retransferred 
where he, being competent to contract, has himself, without coercion or undue influence having been 
brought to bear on him, ratified the sale to the trustee with full knowledge of the facts of the case and 
of his rights as against the trustee. 

63.  Following  trust-property—into  the  hands  of  third  persons;—Where trust-property comes 
into the hands of a third person inconsistently with the trust, the beneficiary may require him to admit 
formally, or may institute a suit for a declaration, that the property is comprised in the trust. 

into  that  into  which  it  has  been  converted.—Where the trustee has disposed of trust-property 
and  the  money  or  other  property  which  he  has  received  therefor  can  be  traced  in  his  hands,  or  the 
hands of his legal representative or legatee, the beneficiary has, in respect thereof, rights as nearly as 
may be the same as his rights in respect of the original trust-property. 

Illustrations 

(a) A, a trustee for B of Rs. 10,000, wrongfully invests the Rs. 10,000 in the purchase of certain land. B is  entitled to the 

land. 

(b) A, a trustee, wrongfully purchases land in his own name, partly with his own money, partly with money 
subject to a trust for B. B is entitled to a charge on the land for the amount of the trust -money so misemployed. 

64.  Saving  of  rights  of  certain  transferees.—Nothing in section 63 entitles the beneficiary to any 

right in respect of property in the hands of—  

(a) a transferee in good faith for consideration without having notice of the trust, either when the 

purchase-money was paid, or when the conveyance was executed, or 

(b) a transferee for consideration from such a transferee. 

A  judgment-creditor  of  the  trustee  attaching  and  purchasing  trust-property  is  not  a  transferee  for 

consideration within the meaning of this section. 

Nothing in section 63 applies to money, currency notes and negotiable instruments in the hands of a 
bona fide holder to whom they have passed in circulation, or shall be deemed to affect the Indian Contract 
Act, 1872 (9 of 1872), section 108, or the liability of a person to whom a debt or charge is transferred. 

65. Acquisition by-trustee of trust-property wrongfully converted.—Where a trustee wrongfully 
sells or otherwise transfers trust-property and afterwards himself becomes the owner of the property, the 
property again becomes subject to the trust, notwithstanding any want of notice on the part of intervening 
transferees in good faith for consideration. 

66.  Right  in  case  of  blended  property.—Where  the  trustee  wrongfully  mingles  the  trust-
property with his own, the beneficiary is entitled to a charge on the whole fund for the amount due 
to him. 

67. Wrongful employment by partner-trustee of trust-property for partnership purposes.—
If a partner, being a trustee, wrongfully employs trust-property in the business or on the account of 

18 

 
the partnership, no other partner is liable therefor in his personal capacity to the beneficiaries, unless 
he had notice of the breach of trust. 

The partners having such notice are jointly and severally liable for the breach of trust.  

Illustrations 

(a) A and B are partners. A dies, having bequeathed all his property to B in trust for Z, and appointed B his sole executor. B, 
instead  of  winding  up  the  affairs  of  the  partnership,  retains  all  the  assets  in  the  business.  Z  may  compel  him,  as  partner,  to 
account  for  so  much  of  the  profits  as  are  derived  from  A’s  share  of  the  capital.  B  is  also  answerable  to  Z  for  the  improper 
employment of A’s assets. 

(b) A, a trader, bequeaths his property to B in trust for C, appoints B his sole executor, and dies. B enters into partnership 
with X and Y in the same trade, and employs A’s assets in the partnership-business. B gives an indemnity to X and Y against the 
claims of C. Here X and Y are jointly liable with B to C as having knowingly become parties to the breach of trust committed by 
B. 

68. Liability of beneficiary joining in breach of trust.—Where one of several beneficiaries—  

(a) joins in committing breach of trust, or 

(b)  knowingly obtains any advantage therefrom, without the consent of the other beneficiaries, or 

(c)  becomes  aware  of  a  breach  of  trust  committed  or  intended  to  be  committed,  and  either 
actually conceals it, or does not within a reasonable time take proper steps to protect the interests of 
the other beneficiaries, or 

(d) has deceived the trustee and thereby induced him to commit a breach of trust,  

the other beneficiaries are entitled to have all his beneficial interest impounded as against him and 
all  who  claim  under  him  (otherwise  than  as  transferees  for  consideration  without  notice  of  the 
breach) until the loss caused by the breach has been compensated. 

When property has been transferred or bequeathed for the benefit of a married woman, so that 
she shall not have power to deprive herself of her beneficial interest, nothing in this section applies 
to such property during her marriage. 

69.  Rights  and  liabilities  of  beneficiary’s  transferee.—Every  person  to  whom  a  beneficiary 
transfers his interest has the rights, and is subject to the liabilities, of the beneficiary in respect of such 
interest at the date of the transfer. 

CHAPTER VII 

OF VACATING THE OFFICE OF TRUSTEES 

70. Office how vacated.—The office of a trustee is vacated by his death or by his discharge from his 

office. 

71. Discharge of trustee.—A trustee may be discharged from his office only as follows:—  

(a) by the extinction of the trust; 

(b) by the completion of his duties under the trust;  

(c)  by such means as may be prescribed by the instrument of  trust; 

(d) by appointment under this Act of a new trustee in his place;  

(e)  by consent of himself and the beneficiary, or, where there are more beneficiaries than one, all 

the beneficiaries being competent to contract; or 

(f)  by the Court to which a petition for his discharge is presented under this Act.  

72.  Petition  to  be  discharged  from  trust.—Notwithstanding  the  provisions  of  section  11, 
every  trustee  may  apply  by  petition  to  a  principal  Civil  Court  of  original  jurisdiction  to  be 
discharged from his office; and if the Court finds that there is sufficient reason for such discharge, 
it  may  discharge  him  accordingly,  and  direct  his  costs  to  be  paid  out  of  the  trust -property.  But 

19 

 
where  there  is  no  such  reason,  the  Court  shall  not  discharge  him,  unless  a  prope r  person  can  be 
found to take his place. 

73.  Appointment  of  new  trustees  on  death,  etc.—Whenever  any  person  appointed  a  trustee 
disclaims, or any trustee, either original or substituted, dies, or is for a continuous period of six months 
absent from 1[India], or leaves  1[India] for the purpose of residing abroad, or is declared an insolvent, or 
desires to be discharged from the trust, or refuses or becomes, in the opinion of a principal Civil Court of 
original jurisdiction, unfit or personally incapable to act in the trust, or accepts an inconsistent trust, a new 
trustee may be appointed in his place by—  

(a) the person nominated for that purpose by the instrument of trust (if any), or  

(b)  if there be no such person, or no such person able and willing to act, the author of the 
trust if he be alive and competent to contract, or the surviving or continuing trustees or trustee 
for the time being, or legal representative of the last surviving and continuing trustee, or (with 
the  consent  of  the  Court)  the  retiring  trustees,  if  they  all  retire  simultaneously,  or  (with  the 
like consent) the last retiring trustee. 

Every  such  appointment  shall  be  by  writing  under  the  hand  of  the  person  making  it.  On  an 

appointment of a new trustee the number of trustees may be increased. 

The  Official  Trustee  may,  with  his  consent  and  by  the  order  of  the  Court,  be  appointed  under  this 

section, in any case in which only one trustee is to be appointed and such trustee is to be the sole trustee. 

The provisions of this section relative to a trustee who is dead include the case of a person nominated 
trustee in a will but dying before the testator, and those relative to a continuing trustee include a refusing 
or retiring trustee if willing to act in the execution of the power. 

74.  Appointment  by  Court.—Whenever  any  such  vacancy  or  disqualification  occurs  and  it  is 
found impracticable to appoint a new trustee under section 73, the beneficiary may, without instituting 
a  suit,  apply  by  petition  to  a  principal  Civil  Court  of  original  jurisdiction  for  the  appointment  of  a 
trustee or a new trustee, and the Court may appoint a trustee or a new trustee accordingly. 

Rule for selecting  new trustees.—In appointing new trustees, the Court shall have regard  (a) 
to  the  wishes  of  the  author  of  the  trust  as  expressed  in  or  to  be  inferred  from  the  instrument  of 
trust; (b) to the wishes of the person, if any, empowered to appoint new trustees; (c) to the question 
whether the appointment will promote or impede the execution of the trust; and  (d) where there are 
more beneficiaries than one, to the interests of all such beneficiaries. 

75.  Vesting  of  trust-property  in  new  trustees.—Whenever  any  new  trustee  is  appointed  under 
section  73  or section  74,  all  the  trust-property  for  the  time  being  vested  in  the  surviving  or  continuing 
trustees or trustee, or in the legal representative of any trustee, shall become vested in such new trustee, 
either solely or jointly with the surviving or continuing trustees or trustee, as the case may require. 

Powers  of  new  trustees.—Every  new  trustee  so  appointed,  and  every  trustee  appointed  by  a 
Court  either  before  or  after  the  passing  of  this  Act,  shall  have  the  same  powers,  authorities  and 
discretions,  and  shall  in  all  respects  act,  as  if  he  had  been  originally  nominated  a  trustee  by  the 
author of the trust. 

76.  Survival  of  trust.—On  the  death  or  discharge  of  one  of  several  co-trustees,  the  trust 
survives and the trust-property passes to the others, unless the instrument of trust expressly declares 
otherwise. 

CHAPTER VIII 

OF THE EXTINCTION OF TRUSTS 

77. Trust how extinguished.—A trust is extinguished—  

(a) when its purpose is completely fulfilled; or 

1. Subs. by the A.O. 1950, for “the provinces”. 

20 

 
                                                      
 
(b) when its purpose becomes unlawful; or 

(c)  when the fulfilment of its purpose becomes impossible by destruction of the trust-property or 

otherwise; or 

(d)  when the trust, being revocable, is expressly revoked. 

78.  Revocation of trust.—A trust created by will may be revoked at the pleasure of the testator. 

A trust otherwise created can be revoked only—  

(a)  where all the beneficiaries are competent to contract—by their consent; 

(b)  where  the  trust  has  been  declared  by  a  non-testamentary  instrument  or  by  word  of 

mouth—in exercise of a power of revocation expressly reserved to the author of the trust; or  

(c)  where  the  trust  is  for  the payment  of  the  debts  of  the  author  of the  trust,  and has  not  been 

communicated to the creditors—at the pleasure of the author of the trust. 

Illustration 

A  conveys  property  to  B  in  trust  to  sell  the  same  and  pay  out  of  the  proceeds  the  claims  of  A’s  creditors.  A 
reserves no power of revocation. If no communication has been made to the creditors, A may revoke the trust. But if 
the creditors are parties to the arrangement, the trust cannot be revoked without their consent.  

79. Revocation not to defeat what trustees have duly done.—No trust can be revoked by the author 

of the trust so as to defeat or prejudice what the trustees may have duly done in execution of the trust. 

CHAPTER IX 

OF CERTAIN OBLIGATIONS IN THE NATURE OF TRUSTS 

80. Where obligation in nature of trust is created.—An obligation in the nature of a trust is created 

in the following cases. 

81. [Where is does not appear that transferor intended to dispose of beneficial interest.] Rep. by the 

Benami Transactions (Prohibition) Act, 1988 (45 of 1988), s. 7 (w.e.f. 19-5-1988). 

82. [Transfer to one for consideration paid by another.] Rep. by s. 7, ibid. (w.e.f. 19-5-1988). 

83.  Trust  incapable  of  execution  or  executed without  exhausting trust-property.—Where 
a  trust  is  incapable  of  being  executed,  or  where  the  trust  is  completely  executed  without 
exhausting the trust-property, the trustee, in the absence of a direction to the contrary, must hold 
the trust-property, or so much thereof as is unexhausted, for the benefit of the author of the trust 
or his legal representative. 

(a) A conveys certain land to B—  

“upon trust”, and no trust is declared; or 

Illustrations 

“upon trust to be thereafter declared”, and no such declaration is ever made; or 

upon trusts that are too vague to be executed; or 

upon trusts that become incapable of taking effect; or 

“in trust for C”, and C renounces his interest under the trust. 

In each of these cases B holds the land for the benefit of A.  

(b) A transfers Rs. 10,000 in the four per cents. to B, in trust to pay the interest annually accruing due to C for 

her life. A dies. Then C dies. B holds the fund for the benefit of A’s legal representative. 

(c) A conveys land to B upon trust to sell it and apply one moiety of the proceeds for certain charitable purposes, 
and the other for the maintenance of the worship of an idol. B sells the land, but the charitable purposes wholly fail, 
and the maintenance of the worship does not exhaust the second moiety o f the proceeds. B holds the first moiety and 
the part unapplied of the second moiety for the benefit of A or his legal representative.  

21 

 
(d) A  bequeaths  Rs.  10,000  to  B,  to  be  laid  out  in  buying  land  to  be  conveyed  for  purposes  which  either  
wholly or partially fail to take effect. B holds for the benefit of A’s legal representative the undisposed of interest in the money or 
land if purchased. 

84. Transfer for illegal purpose.—Where the owner of property transfers it to another for an illegal 
purpose and such purpose is not carried into execution, or the transferor is not as guilty as the transferee, 
or the effect of permitting the transferee to retain the property might be to defeat the provisions of any 
law, the transferee must hold the property for the benefit of the transferor. 

85. Bequest for illegal purpose.—Where a testator bequeaths certain property upon trust and 
the  purpose  of  the  trust  appears  on  the  face  of  the  will  to  be  unlawful,  or  during  the  testator ’s 
lifetime  the  legatee  agrees  with  him  to  apply  the  property  for  an  unlawful  purpose,  the  legatee 
must hold the property for the benefit of the testator’s legal representative. 

Bequest  of  which  revocation  is  prevented  by  coercion.—Where  property  is  bequeathed  and  the 
revocation of the bequest is prevented by coercion, the legatee must hold the property for the benefit of 
the testator’s legal representative. 

86.  Transfer  pursuant  to  rescindable  contract.—Where  property is transferred in pursuance of a 
contract  which  is  liable  to  rescission  or  induced  by  fraud  or  mistake,  the  transferee  must,  on  receiving 
notice to that effect, hold the property for the benefit of the transferor, subject to repayment by the latter 
of the consideration actually paid. 

87.  Debtor  becoming  creditor’s  representative.—Where  a  debtor  becomes  the  executor  or  other 

legal representative of his creditor, he must hold the debt for the benefit of the persons interested therein. 

88.  Advantage  gained  by  fiduciary.—Where  a  trustee,  executor,  partner,  agent,  director  of  a 
company, legal advisor, or other person bound in a fiduciary character to protect the interests of another 
person,  by  availing  himself  of  his  character,  gains  for  himself  any  pecuniary  advantage,  or  where  any 
person so bound enters into any dealings under circumstances in which his own interests are, or may be, 
adverse to those of such other person and thereby gains for himself a pecuniary advantage, he must hold 
for the benefit of such other person the advantage so gained. 

Illustrations 

(a) A,  an  executor,  buys  at  an  undervalue  from  B,  a  legatee,  his  claim  under  the  will.  B  is  ignorant  of  the  value  of  the 

bequest. A must hold for the benefit of B the difference between the price and value. 

(b) A, a trustee, uses the trust-property for the purpose of his own business. A holds for the benefit of his beneficiary the 

profits arising from such user. 

(c)  A, a trustee, retires from his trust in consideration of his successor paying him a sum of money. A holds such money for 

the benefit of his beneficiary. 

(d) A, a partner, buys land in his own name with funds belonging to the partnership. A holds such land for the benefit of the 

partnership. 

(e)  A,  a  partner,  employed  on  behalf  of  himself  and  his  co-partners  in  negotiating  the  terms  of  a  lease,  clandestinely 

stipulates with the lessor for payment to himself of a lakh of rupees. A holds the lakh for the benefit of the partnership. 

(f)  A and B are partners. A dies. B, instead of winding up the affairs of the partnership, retains all the assets in the business. 

B must account to A’s legal representative for the profits arising from A’s share of the capital. 

(g) A, an agent employed to obtain a lease for B, obtains the lease for himself. A holds the lease for the benefit of B.  

(h) A, a guardian, buys up for himself incumbrances on his ward B’s estate at an undervalue. A holds for the benefit of B the 

incumbrances so bought, and can only charge him with what he has actually paid. 

89. Advantage gained by exercise of undue influence.—Where, by the exercise of undue influence, 
any  advantage  is  gained  in  derogation  of  the  interests  of  another,  the  person  gaining  such  advantage 
without consideration, or with notice that such influence has been exercised, must hold the advantage for 
the benefit of the person whose interests have been so prejudiced. 

90.  Advantage gained by qualified owner.—Where a tenant for life, co-owner, mortgagee or other 
qualified  owner  of  any  property,  by  availing  himself  of  his  position  as  such,  gains  an  advantage  in 
derogation  of  the  rights  of  the  other  persons  interested  in  the  property,  or  where  any  such  owner,  as 
representing all persons interested in such property, gains any advantage, he must hold, for the benefit of 

22 

 
all persons so interested, the advantage so gained, but subject to repayment by such persons of their due 
share  of  the  expenses  properly  incurred,  and  to  an  indemnity  by  the  same  persons  against  liabilities 
properly contracted, in gaining such advantage. 

Illustrations 

(a) A,  the  tenant  for  life  of  leasehold  property,  renews  the  lease  in  his  own  name  and  for  his  own  benefit.  A  holds  the 

renewed lease for the benefit of all those interested in the old lease. 

(b) A village belongs to a Hindu family. A, one of its members, pays nazrana to Government and thereby procures his 

name to be entered as the inamdar of the village. A holds the village for the benefit of himself and the other members.  

(c)  A mortgages land to B, who enters into possession. B allows the Government revenue to fall into arrear with a view to 
the  land being  put up  for  sale  and  his  becoming  himself  the  purchaser  of  it.  The  land  is  accordingly  sold  to  B.  Subject  to  the 
repayment  of  the  amount  due  on  the  mortgage  and  of  his  expenses  properly  incurred  as  mortgagee,  B  holds  the  land  for  the 
benefit of A. 

91.  Property  acquired  with  notice  of  existing  contract.—Where  a  person  acquires  property 
with  notice  that  another  person  has  entered  into  an  existing  contract  affecting  that  property,  of 
which specific performance could be enforced, the former must hold the property for the benefit of 
the latter to the extent necessary to give effect to the contract. 

92.  Purchase  by  person  contracting  to  buy  property  to  be  held  on  trust.—Where  a  person 
contracts to buy property to be held on trust for certain beneficiaries and buys the property accordingly, 
he must hold the property for their benefit to the extent necessary to give effect to the contract. 

93.  Advantage  secretly  gained  by  one  of  several  compounding  creditors.—Where  creditors 
compound the debts due to them, and one of such creditors, by a secret arrangement with the debtor, gains 
an undue advantage over his co-creditors, he must hold for the benefit of such creditors the advantage so 
gained. 

94.  [Constructive  trusts  in  cases  not  expressly  provided  for].—Rep.  by  the  Benami 

Transactions (Prohibition) Act, 1988 (45 of 1988), s. 7 (w.e.f. 19-5-1988). 

95.  Obligor’s  duties,  liabilities  and  disabilities.—The  person  holding  property  in  accordance 
with any of the preceding sections of this Chapter must, so far as may be, perform the same duties, 
and is subject, so far as may be, to the same liabilities and disabilities, as if he were a trustee  of the 
property for the person for whose benefit he holds it: 

Provided that (a) where he rightfully cultivates the property or employs it in trade or business, he is 
entitled  to  reasonable  remuneration  for  his  trouble,  skill  and  loss  of  time  in  such  cultivation  or 
employment;  and  (b)  where  he  holds  the  property  by  virtue  of  a  contract  with  the  person  for  whose 
benefit he holds it, or with any one through whom such person claims, he may, without the permission of 
the Court, buy or become lessee or mortgagee of the property or any part thereof. 

96. Saving of rights  of bona fide purchasers.—Nothing contained in this Chapter shall impair the 
rights of transferees in good faith for consideration, or create an obligation in evasion of any law for the 
time being in force. 

23 

 
 
 
 
 
 
 
 
 
 
THE SCHEDULE 

(See section 2) 

STATUTE 

Year and Chapter 

Short Title 

Extent of repeal 

29 Car. II, c. 3 . . . . 

The Statute of Frauds1 

Sections 7, 8, 9, 10 and 11. 

ACTS OF THE GOVERNOR GENERAL IN COUNCIL 

Number and year 

Short title 

Extent of repeal 

XXVII of 1866 . . .  

2The Trustees’ and 
Mortgages’ Powers Act, 1866 

Sections 
2,3,4,5,32,33,34,35,36 and 37. 

In sections 3*** 43 the word 
“trustee” wherever it occurs; 
and in section 43 the words 
“management or” and “the 
trust-property or”. 

In section 12 the first 
illustration. 

1 of 1877 . . . 

3The Specific Relief Act, 
1877 

____________ 

1. Rep. in its application to India. 
2. Rep. 
3. The figures “39, and” by implication the word “and”, rep. by Act 12 of 1891, s. 2 and the First Sch.  

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